Better to have $1 balance on cards?

PROBABLY NOT...(SOME CREDIT CARDS HAVE A MINIMUM
INTEREST FEE UP TO $1.50 or $2.00)

Spend $$$$ let the statement generate...wait 2 or 3 days and PAY OFF

 

I do think carrying 0 balances does hurt your FICO. I have noticed my scores decrease when I carry a 0 balance.

I know it has been discussed before what the optimal balance is, IMHO, I **think** it is between 3 - 15%, just an opinion though. But it is definetely not a zero balance.

 

Re: Re: Better to have $1 balance on cards?

...BUT is it WORTH paying the interest...vs the F.I.C.O. benefit???

 

Re: Re: Better to have $1 balance on cards?

Not unless you will be applying for credit in the near future and need the maximum for FICO scores. If it was a mortgage/refi I was going for, I would probably carry about a 3% balance. I wouldn't want the cc monthly payment to count too much towards my debt to income ratio for the mortage loan.

Otherwise, carry zero and avoid any interest charges.

 

Re: Re: Better to have $1 balance on cards?

All my cc are zero balance. The scores did not change even with little balance.

 

Re: Re: Better to have $1 balance on cards?

"IF" the credit card company sends the CRA's your statement balance...AND the CRA's imputs it...YOU WILL SHOW A BALANCE EVEN IF IT PAID OFF...

I JUST COULD NOT SEE +20 or +30 POINTS FOR OWING $300 TOTAL ON 6 OR SO ACCOUNTS...BUT WITH F.I.C.O. WHO KNOWS???

 

Re: Re: Better to have $1 balance on cards?

...BUT this is from the company that decided that ONE INQUIRY is better than ZERO INQUIRES!!!

 

Re: Re: Better to have $1 balance on cards?

use one card a month for conveniences and pay it off. That way you rotate usage on your major credit cards. You do want activity. That increases your score. You don't want too much activity (keep it under 20% of your credit line).

So if you have 3 major cards.. just rotate usage:
Jan Visa 1
Feb MC
March Visa 2
April Visa 1
May MC
June Visa 2

that way you have used them but kept everything in line. IF you want better terms with your creditors you need to use your cards some (some cards will want to cancel you if you never use their cards)

 

Re: Re: Re: Better to have $1 balance on cards?

So if you have all the credit you need, where do you get your 1 inquiry a year from?

 

Re: Re: Re: Re: Better to have $1 balance on cards?

Call one of your CURRENT cards and tell them they can PULL A HARD...make it worth your while...+$10,000 or so...

"IF" they say they can do an increase WITH-OUT a HARD...YOU WIN!!!

Just keep trying...I GUESS

 

Always charge something on each card EVERY month. Lets say on one credit card you have had a $0 balance since June. Your payment history will only report up until June on that card. You are not going to get the FICO point payment history between June and now. Putting a credit card away and not using it only helps with the overall age with the accounts. The payment history suffers when you do that. The creditor that issued you the account can also see it that way. Sometimes a credit issuer will determine a CL increase using the amount of times you have made an on time payment.

I have played with well over 100 FICO simulators on different reports and have also discovered this. 1% to 3% seems to be the best CL to balance ratio. 0% actually hurts a credit score in most cases. That is because FICO determines no future payment history on those accounts. A 0% balance to CL is usually as bad as almost 10% CL to balances.

Of course people with higher FICO scores are able to carry higher CL to balances compared with people with lower scores. Some people that have scores in the mid to upper 700's can easily carry 20% without much of a negative effect to the FICO score.

What I do is charge between $5-$9 on each credit card and have that statement hit along with the CRA update. Every once in a while it is a good idea to charge up balances between that 15 day or so window and pay off the entire balance when you send in your payment. The CRA's usually never see the full balance being reported (between that time frame) and the creditor can see that you can handle balances.

If you have no credit card debt and have 4 credit cards do this. Charge $6.99 or $7.99 or $8.99 in gas for your car. The CRA does not report the 99 cents and you do not have to figure in tax when paying. If any of your credit cards do not have a grace period it might not be worth paying the intrest and the 37 cents for the stamp. But it should keep your balances on your reports between 1 and 2% with ease.

 

i pretty much agree with Vick.
i have also played with many simulators and with my own scores and the best seems to be about 1% usage. so with a 10,000 limit, 100 is a good balance. if you pay before the statement ends then you dont get those charges reported the the cra. just make sure at the statement date you have about 1% of the cl used. also the optimal number of accounts to have balances is 4. so if you have 2 installment accounts and 5 credit cards, you have a balance on 2 installment accounts and only have to keep that 1% 'statement' balance on 2 cards. off course pay that off after the statement posts to avoid finance charges.